Asked by Savannah Calkins on Apr 25, 2024
Verified
The government of Ligesia, a country in South America, has lowered its taxes by 25 percent. Consequently, the discretionary income of its citizens has increased, which in turn has increased their private spending. In the given scenario, the government of Ligesia has used _____.
A) fiscal policy
B) monetary policy
C) an open door policy
D) a commercial policy
Discretionary Income
The amount of an individual's income left for spending, investing, or saving after taxes and personal necessities have been paid.
Fiscal Policy
Government policies related to taxation and spending that are used to influence a country's economic conditions.
Private Spending
Expenditures made by individuals, households, and businesses in the private sector, excluding government spending.
- Recognize the tools and effects of fiscal and monetary policy on a country's economy.
- Relate economic policies to the economic growth and stability of a country.
Verified Answer
LH
Loser Hannah5 days ago
Final Answer :
A
Explanation :
The government of Ligesia has used fiscal policy, which involves changes in government spending and taxation to influence the economy. Lowering taxes is a direct application of fiscal policy to increase disposable income and stimulate spending.
Learning Objectives
- Recognize the tools and effects of fiscal and monetary policy on a country's economy.
- Relate economic policies to the economic growth and stability of a country.